Our Tuesday look at stocks reporting June quarter earnings included a big bank, the world’s largest semiconductor maker, a health care giant, and a top regional bank: Morgan Stanley, TSMC, UnitedHealth, US Bancorp. <\/p>\n
After markets close Thursday, we’ll hear from one of the premier materials companies, while Friday morning offers reports from a Sweden-based networking giant and a major U.S. railroad.<\/p>\n
Alcoa Corp. (NYSE: AA) has seen its share price increase by more than 200% in the past year. The growth spurt mostly occurred in 2020, but the stock is up more than 50% so far this year. Aluminum futures outpaced copper for a while earlier this year, but the situation has since reverted to normal. The company reports second-quarter results after markets close Thursday.<\/p>\n
Analysts are mixed on Alcoa, with six of those surveyed rating the stock a Buy or Strong Buy and another six rating the shares at Hold. With a median price target of $45, the implied upside to a recent price of around $35.40 is 27%. At the high target of $56, the upside potential is 58%.<\/p>\n
June-quarter revenue is forecast to rise by nearly 22% year over year to $2.62 billion. Revenue in the prior quarter totaled $2.87 billion. Adjusted earnings per share (EPS) is forecast at $1.28, up from $0.79 in the first quarter and a loss per share of two cents in the second quarter of last year. For the full year, analysts are forecasting EPS of $4.76, compared to a loss per share of $1.16 in 2020. Sales are forecast to rise by about 18% to $10.96 billion.<\/p>\n
The stock currently trades at around 7.8 times expected 2021 EPS, 7.8 times estimated 2022 EPS and 7.3 times estimated 2023 earnings. Alcoa’s 52-week trading range is $10.98 to $44.42, and the company does not pay a dividend.<\/p>\n
Stockholm-based network equipment maker Telefonaktiebolaget LM Ericsson (NASDAQ: ERIC) reports second-quarter results before markets open on Friday. Over the past 12 months, the company’s share price has risen by about 44% while the year-to-date increase has dipped to around 11.6%.<\/p>\n
Of 24 analysts covering the stock, 17 rate Ericsson as a Buy or Strong Buy. There are four Hold ratings and three Sell ratings as well. Based on a median price target of $16.91 and a current price of around $13.30, the upside potential is nearly 25%. At the high price target of $21, the upside potential is around 58%.<\/p>\n
Analysts are expecting the company to report revenue of $6.65 billion, up sequentially from $5.70 billion and year over year from $5.96 billion. EPS is forecast at $0.16, up from $0.12 in the first quarter and $0.10 a year ago. For the full year, analysts are looking for EPS of $0.76 (up 8.3%) and revenue of $27.81 billion (down about 1.6%).<\/p>\n
The stock currently trades at around 17.6 times expected 2021 EPS, 15.3 times estimated 2022 EPS and 13.5 times estimated 2023 earnings. Ericsson’s 52-week range is $9.57 to $15.32. The company pays an annual dividend of $0.20 (yield of 1.52%).<\/p>\n
Since first announcing an agreement in March of 2020 to merge with Canadian Pacific, Kansas City Southern (NYSE: KSU) stock is up about 170%. In May, the railroad announced that it had a superior offer from Canadian National and agreed to accept that deal, which values the railroad at $33.6 billion, including debt (a premium of around 45% to the March 2020 valuation). The deal hasn’t made it through regulators yet and may have a difficult time doing so. The stock was up more than 200% before the deal with Canadian National was announced. Kansas City Southern reports June quarter earnings before first thing Friday morning.<\/p>\n
The Canadian National offer sets the price per share of common stock at $325, well above a current price of around $267.50. The difference is down to the likelihood that regulators will approve the merger. Nine of 15 analysts rate the shares a Hold and five rate the stock a Buy or Strong Buy. The price targets are just different degrees of bad news.<\/p>\n
Analysts expect the company to report second-quarter revenue of $748.86 million, up from $706.00 million in the first quarter and $547.9 million in the second quarter of last year. EPS is tabbed at $2.16, up sequentially from $1.91 and year over year from $1.15. For the full year, analysts are forecasting EPS of $8.94 (up 28.4%) and revenue of $3.02 billion (up nearly 15%).<\/p>\n
The stock currently trades at around 30.3 times expected 2021 EPS, 25.7 times estimated 2022 EPS and 23.4 times estimated 2023 earnings. Kansas City Southern’s 52-week range is $52.18 to $315.39, and the company pays an annual dividend of $2.16 (yield of 0.80%).<\/p>\n